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Marks & Spencer to forgo AGM trading update

‘Relatively unusual’ decision part of new chairman’s strategy

Mon, Jul 9, 2018, 11:57Updated: Mon, Jul 9, 2018, 11:59

In May, M&S said it will shut more than 100 outlets by 2022 as it accelerates a transformation programme that will see thousands of jobs put at risk.

Marks & Spencer has decided to forgo its usual trading update when it meets shareholders at its annual general meeting (AGM) this week.

It will be the first AGM under the retailer’s new chairman, Archie Norman, who was parachuted in last year to lead a turnaround of the business.

However, M&S will not be informing the market on its first-quarter trading, as it has done in previous years.

It is understood that M&S’s decision to keep its financial figures under wraps is part of Mr Norman’s plans to take a more long-term view of the embattled business.

Programme

Clive Black, retail analyst at Shore Capital, said it was “relatively unusual” for a company not to update the market on trading at its AGM, but that there was no requirement for M&S to do so.

“M&S is in a multi-year change programme with a new management team,” he said.

“Clearly that team wants the space to implement its plans with reduced stockmarket distraction and so it is pressing on.”

However, the board would be obliged to issue a financial statement if it believes it will miss profit targets for the full year.

Shore Capital expects M&S’s pre-tax profit to come in at £540 million (€611 million )for the 2019 financial year.

M&S now only reports its full-year, half-year and third-quarter figures, which come shortly after Christmas.

Richard Hyman, an independent retail analyst, said: “If they had good news, they would probably want to share it.

Profit

“This is a trading environment where it is actually sensible to spend more time on trading the business and less on talking about it. You really want your top people to spend as much time as possible on the really important stuff in the business.”

M&S booked a 62.1 per cent fall in pre-tax profit to £66.8 million in the year to March 31st as it was dragged down by £321.1 million in costs linked to store closures.

In May, the retailer said it will shut more than 100 outlets by 2022 as it accelerates a transformation programme that will see thousands of jobs put at risk.